First Look

July 18, 2017

The creative habits of ordinary people

Much has been written on the creative habits of extraordinary people, but what can we learn from how ordinary people approach creativity? "Evidence is mounting," writes Teresa M. Amabile, "that such individuals can be responsible for important instances of creativity and innovation in the world: open innovation, user innovation, and citizen innovation." In Pursuit of Everyday Creativity.

Pursuing innovation at Polaroid

Polaroid and its founder, Edwin Land, invented the field of instant photography. A recent case study written by Tom Nicholas, Christopher Stanton, and Matthew Preble examines the rise and fall of the company and its culture of innovation. "How did Polaroid rise to a position of such preeminence, and was its downfall inevitable?" ask the authors. Edwin Land: The Art and Science of Innovation. (See the online exhibit, Edwin H. Land and the Polaroid Corporation: The Formative Years.)

Do we know how to improve bad working conditions?

In response to criticism about exploitive working conditions, companies have responded with a variety of organizational structures. Which types actually improve working conditions? Researchers Yanhua Zhou, Jodi L. Short, and Michael W. Toffel explore the question in the working paper, Organizational Structures and the Improvement of Working Conditions in Global Supply Chains: Legalization, Participation, and Economic Incentives.

— Sean Silverthorne
 
  • May 11, 2017
  • New England Journal of Medicine

Good Riddance to Big Insurance Mergers

By: Dafny, Leemore S.

Abstract—Federal judges issued preliminary injunctions halting mergers of four of the five largest U.S. health insurers. These decisions provide more precedent to support challenges of mergers between competitors in health care markets—whether payers or providers.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=52843

  • May 2017
  • Strategic Organization

Firms, Crowds, and Innovation

By: Felin, Teppo, Karim R. Lakhani, and Michael L. Tushman

Abstract—The purpose of this article is to suggest a (preliminary) taxonomy and research agenda for the topic of “firms, crowds, and innovation” and to provide an introduction to the associated special issue. We specifically discuss how various crowd-related phenomena and practices—for example, crowdsourcing, crowdfunding, user innovation, and peer production—relate to theories of the firm, with particular attention on “sociality” in firms and markets. We first briefly review extant theories of the firm and then discuss three theoretical aspects of sociality related to crowds in the context of strategy, organizations, and innovation: (1) the functions of sociality (sociality as extension of rationality, sociality as sensing and signaling, sociality as matching and identity); (2) the forms of sociality (independent/aggregate and interacting/emergent forms of sociality); and (3) the failures of sociality (misattribution and misapplication). We conclude with an outline of future research directions and introduce the special issue papers and essays.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=52911

  • July–August 2017
  • Harvard Business Review

Case Study: Follow Dubious Orders or Speak Up?

By: Sucher, Sandra J., and Matthew Preble

Abstract—The article discusses an intern for the technology security company Zantech addressing her concerns about her boss in Seoul, South Korea, regarding an inappropriate suggestion on misrepresenting her identity. An overview of the ethical aspects of addressing her concerns to the company’s management, including in regard to corporate culture and the ethical behavior of Zantech’s competition, is provided.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=52849

In Pursuit of Everyday Creativity

By: Amabile, Teresa M.

Abstract—Creativity researchers have long paid careful attention to individual creativity, beginning with studies of well-known geniuses, and expanding to personality, biographical, cognitive, and social-psychological studies of individual creative behavior. Little is known, however, about the everyday psychological experience and associated creative behavior in the life and work of ordinary individuals. Yet evidence is mounting that such individuals can be responsible for important instances of creativity and innovation in the world: open innovation, user innovation, and citizen innovation. Research into this phenomenon could do much to advance the study and practice of creativity.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=52919

Abstract—CEO activism refers to corporate leaders speaking out on social and environmental policy issues not directly related to their core business. In the first study of this phenomenon, we investigate how CEO activism can influence public opinion about these issues and consumer attitudes about the CEO’s company. Using a quasi-field experiment, we find that CEO activism can sway public opinion and increase consumers’ intentions to purchase products from the CEO’s company. However, we find that these two effects of CEO activism depend on the alignment between the CEO activist’s message and individuals’ preexisting policy preferences. Finally, we find no evidence that CEO activists using economic language are more persuasive in their appeals.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=50763

The Relevance of Broker Networks for Information Diffusion in the Stock Market

By: Di Maggio, Marco, Francesco Franzoni, Amir Kermani, and Carlo Sommavilla

Abstract—This paper shows that the network of relationships between brokers and institutional investors shapes the information diffusion in the stock market. We exploit trade-level data to show that central brokers gather information by executing informed trades, which is then leaked to their best clients. We show that after large informed trades, a significantly higher volume of other institutional investors execute similar trades through the same broker, allowing them to capture higher returns in the first few days after the initial trade. In contrast, we find that when the informed asset manager is affiliated with the broker, such imitation does not occur. Similarly, we show that the clients of the broker employed by activist investors to execute their trades tend to buy the same stocks just before the filing of the 13D. This evidence also suggests that an important source of alpha for fund managers is the access to better connections rather than superior skill.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=52908

Knowing When to Ask: The Cost of Leaning-in

By: Exley, Christine L., Muriel Niederle, and Lise Vesterlund

Abstract—Gender differences in the propensity to negotiate are often used to explain the gender wage gap, popularizing the push for women to “lean-in" and negotiate more. In an environment where women who negotiate achieve positive returns, we find that negotiating more is costly: women appear to know when to ask. Relative to women, men enter negotiations more often and experience less financial harm from negotiating more. While both genders positively select into negotiations on observable characteristics of the negotiation environment, only women positively select on unobservables such as their ability to negotiate.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=50917

Abstract—Exploitive working conditions have spurred the development of formal organizational structures that deploy mechanisms including legalization—adherence to a set of law-like rules and procedures—and worker participation to improve labor standards in global supply chains. Yet little is known about whether these structures are associated with improved working conditions, especially in organizations in which they compete with productivity-driving economic incentives. Drawing on the economic sociology of law and organizations as well as theories of organizational learning, we investigate whether and how these formal organizational structures, individually and in combination, are associated with improved working conditions. Using data on 3,276 suppliers in 55 countries, we find greater improvement at suppliers that adopt legalization structures (operationalized as management system standards) and worker participation structures (unions) and find that the combination of these structures amplifies improvement. We find less improvement at suppliers with organizational incentive structures meant to increase worker productivity (piece-rate pay), but also find that this negative relationship is attenuated by organizational legalization and worker participation structures. These findings challenge existing theories of decoupling by showing how these organizational structures can be credible signals for improvement and can also be coupled with organizational changes via processes of organizational learning, even in the face of intense efficiency demands. Furthermore, our findings suggest important strategic considerations for managers selecting supplier factories and provide key insights for the design of transnational sustainability governance regimes.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=52922

No abstract available.

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No abstract available.

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  • Harvard Business School Case 317-032

Climate Change in 2017: Implications for Business

This note provides general information about climate change and its implications for business. Included is an overview of climate change science and a number of its impacts, including rising sea levels, changing weather patterns and extreme weather, pressure on water and food, political and security risks, human health risks, and impact on wildlife and ecosystems. Next, responses to climate change are outlined, including improvements in energy efficiency, moving away from fossil fuels, changes in land use and agriculture practices, and geoengineering. The note concludes with the debate over how much should be spent to mitigate and adapt to climate change, who should pay, and the implications for the private sector.

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  • Harvard Business School Case 316-127

Publicis Groupe 2016: Maurice and the Millennials

Having built Publicis Groupe through acquisitions maintained as separate brands, CEO Maurice Lévy wanted to transform the advertising and marketing firm to an integrated digital-ready enterprise to address industry changes. In early 2016, following a reorganization, he faced questions of how to change the culture and use digital capabilities more effectively than competitors. Lévy turned to millennials within the Groupe and technology entrepreneurs outside the Groupe for innovations in order to create platforms for clients rather than simply react to existing social media platforms. As he increasingly focused on a new generation, questions remained about who would succeed this CEO of 31 years.

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  • Harvard Business School Case 217-062

The U-Turns of National Truck Stops

Raj Makam had spent months trying to restructure a 2006 investment he had made in National Truck Stops, Inc. (NTS) as a senior member of Oaktree Capital Management’s (Oaktree) Mezzanine finance business within their Corporate Debt platform. It was the first time they had truly considered forcing a company into involuntary bankruptcy, which he clearly would prefer to avoid lest they risk losing their entire investment. As the company’s financial position worsened, Oaktree’s counterparties became increasingly difficult. It often seemed as if they were prioritizing their ongoing business relationships over the economics of their respective investments. Oaktree knew the cards were stacked in its favor legally, but did that really make a difference when the cost of perfecting its interests would be so expensive and difficult? Would this be a Pyrrhic victory?

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  • Harvard Business School Case 817-107

Edwin Land: The Art and Science of Innovation

Throughout the second half of the 20th century, Polaroid first invented—and then continuously reinvented—the field of instant photography. Under the leadership of its mercurial founder Edwin Land, the company regularly released new instant cameras and films, often without any market research. Land created a culture of innovation and exploration within Polaroid that became conducive to the development of new customer value propositions. However, this proved difficult to sustain over the long run, and the business ultimately went into bankruptcy in 2001. How did Polaroid rise to a position of such preeminence, and was its downfall inevitable?

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Founded in 2013 as a laundry service featuring online ordering for home pickup and delivery, China’s edaixi (eWash) illustrated the online-to-offline (O2O) business model. As yet unclear in 2016 was the optimal way to organize third-party laundry service providers, locally sourced teams of freelancers, and in-house operations.

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Founded in 2013 as a laundry service featuring online ordering for home pickup and delivery, China’s edaixi (eWash) illustrated the online-to-offline (O2O) business model. As yet unclear in 2016 was the optimal way to organize third-party laundry service providers, locally sourced teams of freelancers, and in-house operations.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/617038-PDF-ENG